What is the relationship between average product and marginal product?
Understand the Problem
The question is asking about the economic concepts of average product and marginal product. It seeks to understand how these two metrics interact and influence each other in production theory.
Answer
When AP rises, MP is above AP. When AP declines, MP is below AP. At AP's maximum, MP equals AP.
The relationship between average product (AP) and marginal product (MP) is as follows: When AP is rising, MP is above AP. When AP is declining, MP is below AP. At the maximum of AP, MP equals AP.
Answer for screen readers
The relationship between average product (AP) and marginal product (MP) is as follows: When AP is rising, MP is above AP. When AP is declining, MP is below AP. At the maximum of AP, MP equals AP.
More Information
This relationship illustrates how the productivity of additional input (marginal product) influences the overall productivity per unit of input (average product). It is essential in understanding production efficiency.
Tips
Common mistakes include confusing the direction of the relationship between AP and MP or oversimplifying the concept. Always remember to analyze whether MP is above or below AP to determine the trend of AP.
